AUDJPY is trending down with its lower highs and lower lows inside a descending channel pattern. Price bounced off support and is pulling up to the Fib levels where sellers might be waiting.

Price is currently testing the 38.2% Fib at the mid-channel area of interest or 76.20. A larger pullback could last until the 50% level at 76.50 or the 61.8% level at 76.60. If any of these levels hold as a ceiling, AUDJPY could resume the drop to the swing low at 75.75 or lower.

The 100 SMA is below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. In other words, the drop is more likely to gain traction than to reverse. The 100 SMA is also close to the 50% Fib level to add to its strength as resistance.

RSI is heading up to show that there is some bullish pressure left before overbought conditions are seen. Stochastic is already indicating overbought conditions and might be due to turn lower to show that sellers are back in the game.

The Aussie is being bogged down by trade war concerns between the US and China, as both nations might be poised to announce another set of tariffs on each other’s products. This comes after Trump’s threats of more trade measures in last week’s tweets.

Another catalyst to watch out for is the Australian jobs report and quarterly wages data, as this could determine whether or not the RBA might be due to cut rates soon. Recall that the central bank decided to keep rates on hold during last week’s statement but said that they will be looking at employment data to gauge if they should pursue easing.

Meanwhile, the yen is able to benefit both from risk aversion on trade tensions and traders’ hesitation to buy the dollar in case more tariffs are doled out.